THE REAL ESTATE DEVELOPERS ASSOCIATION OF HONG KONG v. THE TOWN PLANNING BOARD

CACV 58/2015

[2018] HKCA 372

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 58 OF 2015

(ON APPEAL FROM HCAL NO. 58 OF 2011)

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DECISION ON COSTS

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Hon Cheung JA (giving the Decision on Costs of the Court) :

1.  On 3 February 2015 Au J allowed the application for judicial review brought by The Real Estate Developers Association of Hong Kong (‘REDA’). He quashed the decisions made by the Town Planning Board (‘TPB’) (‘the Decisions’) and remitted the Decisions back to TPB for reconsideration.

2.  Au J further awarded REDA 80% of its costs in the application.

3.  TPB filed a Notice of Appeal on 10 March 2015 against the judgment.  TPB asked for the judgment to be set aside and the costs order reversed.

4.  On 24 March 2015, REDA filed a Respondent’s Notice asking that,

1)  the judgment be varied such that, in addition to the remedies granted in the judgment, declarations be granted as set out at paragraphs 3, 4 and 5 of REDA’s Form 86; and

2)  further/alternatively, the judgment be affirmed on the additional/alternative grounds set out in the Respondent’s Notice.

5.  As recorded in a Consent Order dated 12 April 2018 and sealed on 19 April 2018 made pursuant to a joint application by the parties dated 11 April 2018, TPB’s appeal was dismissed and REDA’s cross‑appeal as set out in its Respondent’s Notice was withdrawn.  The parties further asked the Court to address the issue of costs.

6.  REDA now asks for

1)  TPB to pay REDA’s costs of the appeal, including the costs of the Respondent’s Notice; or alternatively,

2)  TPB to pay REDA’s costs of the appeal with no order as to the costs of the Respondent’s Notice. 

7.  REDA also asks for the costs of the joint application of 11 April 2018, the Consent Order of 12 April 2018 and the present application.

8.  This is opposed by TPB which asks the Court to order the parties to bear its own costs (save and except that REDA should bear the costs of the present application).

9.  REDA’s basis for seeking costs against TPB is that as a result of the determination of Oriental Generation Ltd v TPB (‘Oriental Generation CACV 127 & 129/2012) [CA] and Hysan Development Ltd v TPB (‘Hysan CACV 232 & 233/2012) [CA] and (2016) 19 HKCFAR 372 [CFA], TPB’s appeal is bound to fail while many of the grounds raised by REDA in its Respondent’s Notice have a good prospect of success and indeed it is bound to succeed on a specific issue relating to Basic Law/proportionality.

10.  When a party requests to have its appeal dismissed, generally it is obliged to pay the other side’s costs.  As Mr Abraham Chan SC for TPB submitted this is correct for obvious reasons: when an appellant withdraws an appeal, this is usually because of a recognised lack of merit in its case.  We are of the view that a similar general approach must apply to the withdrawal of a party’s case under a Respondent’s Notice.  REDA is asking this Court to depart from this general approach in respect of its withdrawal of the cross‑appeal. 

11.  Where a case is settled except as to costs the overriding objective of the Court in the exercise of its power to make a costs order is to do justice between the parties without incurring unnecessary court time and consequently additional costs.  One factor is whether (and to what extent) it can determine which party would have prevailed had the substantive issues been fought to a conclusion.  How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.  In the absence of any good reason to make any other order the fall back is to make no order as to costs : see the English Court of Appeal’s decision in Brawley v Marczynski (No 1) [2003] 1 WLR 813 (at paragraph 21) endorsed by this Court (Lam VP and Barma JA) in Golden Tonn Industrial Limited v Hong Kong Cyberport (Ancillary Development Limited) [2015] 3 HKC 226. 

12.  The merits of TPB’s appeal and REDA’s cross‑appeal clearly require proper analysis which we are not prepared to undertake in the absence of full arguments which clearly will necessarily incur further costs and time.  This is not a case where the issue is so patently clear that the Court can with confidence make a ruling on which party is likely to succeed on the substantial issues.

13.  This being the case the appropriate order is that each party will bear its own costs in respect of the appeal and cross‑appeal (including all consequential applications) and the present application for costs.  The Court will take a broad brush approach regarding the costs of the present application and order that each party to bear its own costs is to apply throughout, notwithstanding that TPB is successful in its costs submission.